[May 24, 2018] |
|
Nutanix Reports Third Quarter Fiscal 2018 Financial Results
Nutanix,
Inc. (NASDAQ: NTNX),
a leader in enterprise cloud computing, today announced financial
results for its third quarter of fiscal 2018, ended April 30, 2018.
This press release features multimedia. View the full release here:
https://www.businesswire.com/news/home/20180524006043/en/
Q3 Fiscal 2018 Earnings Highlights (Graphic: Business Wire)
Third Quarter Fiscal 2018 Financial Highlights
-
Revenue: $289.4 million, growing 41% year-over-year from $205.7
million in the third quarter of fiscal 2017, reflecting the
elimination of approximately $52 million in pass-through hardware
revenue in the quarter as the company executes its shift toward
increasing software revenue*
-
Billings: $351.2 million, growing 50% year-over-year from
$234.1 million in the third quarter of fiscal 2017
-
Gross Profit: GAAP gross profit of $193.8 million, up 58%
year-over-year from $122.5 million in the third quarter of fiscal
2017; Non-GAAP gross profit of $197.8 million, up 57% year-over-year
from $125.9 million in the third quarter of fiscal 2017
-
Gross Margin: GAAP gross margin of 67.0%, up from 59.5% in the
third quarter of fiscal 2017; Non-GAAP gross margin of 68.4%, up from
61.2% in the third quarter of fiscal 2017
-
Net Loss: GAAP net loss of $85.7 million, compared to a GAAP
net loss of $96.8 million in the third quarter of fiscal 2017;
Non-GAAP net loss of $34.6 million, compared to a non-GAAP net loss of
$45.7 million in the third quarter of fiscal 2017
-
Net Loss Per Share: GAAP net loss per share of $0.51, compared
to a GAAP net loss per share of $0.67 in the third quarter of fiscal
2017; Non-GAAP net loss per share of $0.21, compared to a non-GAAP net
loss per share of $0.32 in the third quarter of fiscal 2017
-
Cash and Short-term Investments: $923.5 million, up 164% from
the third quarter of fiscal 2017
-
Deferred Revenue: $539.9 million, up 62% from the third quarter
of fiscal 2017
-
Operating Cash Flow: $13.3 million, compared to $(16.0) million
in the third quarter of fiscal 2017
-
Free Cash Flow: $(0.8) million, compared to $(29.2) million in
the third quarter of fiscal 2017
Reconciliations between GAAP and non-GAAP financial measures and key
performance measures are provided in the tables of this press release.
"Investment in our innovation engine is delivering strong results. At
.NEXT, we introduced major new products that extend our unique
consumer-grade value into security, networking, database operations, and
multi-cloud markets," said Dheeraj Pandey, Chairman, Founder and CEO of
Nutanix. "Our continued industry-leading Net Promoter Score proves that
a relentless focus on our customers drives our continued success."
"Demand for our solutions remains strong as we saw 67 percent growth in
software and support billings and 55 percent growth in software and
support revenue. We had strong success in our hiring in the quarter that
positions us to deliver on our future growth plans, as we outlined at
our March Investor Day," said Duston Williams, CFO of Nutanix. "The
continued growth in our software and support billings and gross margin
expansion in the quarter demonstrates we are successfully executing on
our transition to a software-defined business model."
Recent Company Highlights
-
Acquired Netsil, Inc.: Completed the acquisition of Netsil,
Inc., a provider of application discovery and operations management
that enables state-of-the-art observability in modern distributed
cloud environments.
-
Executed on Transition to Software-Defined Business Model: Grew
software and support billings by 67 percent year-over-year, including
three software and support deals worth more than $5 million each.
Pass-through hardware billings decreased to 17 percent of total
billings in the quarter, down from 25 percent in the year-ago quarter.
-
Improved AHV Penetration: Grew adoption of AHV, the company's
built-in hypervisor, to 33%, based on a four-quarter rolling average
of nodes using AHV as a percentage of NX nodes sold.
-
Expanded Customer Base: Nutanix ended the third quarter of
fiscal 2018 with 9,690 end-customers, adding 820 new end-customers
during the quarter and growing deals greater than $1 million by 28
percent year-over-year.
-
Announced Three New Innovative Products for Multi-Cloud
Environments:
-
Nutanix Flow, which completes its core infrastructure
services offering and provides customers with a software-defined
networking solution for the multi-cloud era. Nutanix Flow solves
customers' security concerns through a unique application-centric
focus combined with native virtual machine (VM) microsegmentation
that protects against internal and external threats.
-
Nutanix Era, which expands on the company's platform
services offering. Beginning with Copy Data Management (CDM),
Nutanix Era empowers database administrators to clone, restore,
and refresh their databases to any point in time leveraging a
virtual time-machine. Copy Data Management, along with other
planned offerings from Nutanix Era, enables companies to address
the complexity and cost of data sprawl with a sophisticated
service that makes complex database operations simple.
-
Nutanix Beam, which introduces the company's first
software-as-a-service offering to the market. Nutanix Beam enables
IT managers to visualize, predict and manage cost, security, and
regulations across multiple clouds. This offering helps
application owners with the unexpectedly high costs of their cloud
services and the lack of visibility and control of their service
consumption.
-
Increased Participation in 4th Annual .NEXT Conference: Nearly
5,000 attendees with 35+ customer speakers, 40+ partner sponsors, and
keynote addresses from visionaries including Anthony Bourdain and
renowned TED talk speaker Dr. Brené Brown; partners including Jason
Lochhead, CTO, Infrastructure, Cyxtera; customers including Vijay
Luthra, SVP, Global Head Of Technology Infrastructure Services,
Northern Trust - Chicago; and strategic alliances including Brian
Stevens, Chief Technology Officer of Google Cloud. Additionally, the
company hosted 20,000+ attendees at .NEXT events around the world over
the past year.
-
Hired New MD of Operations in India: Hired Sankalp Saxena as
Senior Vice President and Managing Director of Operations of its India
subsidiary to lead its India operations and execute on the company's
growth strategy, including product innovation, talent acquisition, and
brand building.
-
Named as a Top Public Cloud Company to Work For: Glassdoor and
Battery Ventures ranked Nutanix one of the top 10 public cloud
computing companies to work for in a recent report.
Q4 Fiscal 2018 Financial Outlook
For the fourth quarter of fiscal 2018, Nutanix expects:
-
Revenues between $295 and $300 million; assuming the elimination of
approximately $95 million in pass-through hardware revenue* and an
increased billings-to-revenue ratio of 1.25;
-
Non-GAAP gross margin between 73% and 74%;
-
Non-GAAP operating expenses between $250 and $260 million;
-
Non-GAAP net loss per share between $0.20 and $0.22, using 171 million
weighted shares outstanding.
*The elimination of hardware revenue is based on the estimated cost of
hardware in transactions where our customers purchase such hardware
directly from our contract manufacturers.
Supplementary materials to this earnings release, including the
company's third quarter fiscal 2018 investor presentation, can be found
at http://ir.nutanix.com/company/financial/.
All forward-looking non-GAAP financial measures contained in this
section titled "Q4 Fiscal 2018 Financial Outlook" exclude stock-based
compensation expense and amortization of intangible assets and may also
exclude, as applicable, other special items. The company has not
reconciled guidance for non-GAAP gross margin and non-GAAP loss per
share to their most directly comparable GAAP measures because such items
that impact these measures are not within its control and are subject to
constant change. While the actual amounts of such items will have a
significant impact on the company's non-GAAP gross margin and non-GAAP
loss per share, a reconciliation of the non-GAAP financial measure
guidance to the corresponding GAAP measures is not available without
unreasonable effort.
Webcast and Conference Call Information
Nutanix executives will discuss the company's fiscal third quarter
financial results on a conference call at 4:30 p.m. Eastern Time/1:30
p.m. Pacific Time today. To listen to the call via telephone, dial
1-833-227-5841 in the United States or 1-647-689-4068 from outside the
United States. The conference ID is 3890209. This call will be webcast
live and available to all interested parties on our Investor Relations
website at ir.nutanix.com.
Shortly after the conclusion of the conference call, a replay of the
audio webcast will be available on the Nutanix Investor Relations
website. A telephonic replay will be available for one week following
the conference call at 1-800-585-8367 or 1-416-621-4642, conference ID
3890209.
New Accounting Standard
The Company adopted ASC 606, the new standard related to revenue
recognition effective August 1, 2017. Prior period information has been
adjusted to reflect the adoption of this new standard.
Non-GAAP Financial Measures and Other Key Performance Measures
To supplement our condensed consolidated financial statements, which are
prepared and presented in accordance with GAAP, we use the following
non-GAAP financial and other key performance measures: billings,
non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP net loss, pro forma non-GAAP net loss per share, free
cash flow, software and support revenue, and software and support
billings. In computing these non-GAAP financial measures, we exclude
certain items such as stock-based compensation and the related income
tax impact, costs associated with our acquisitions (such as amortization
of acquired intangible assets, revaluation of contingent consideration,
income tax-related impact, and other acquisition-related costs), loss on
debt extinguishment, amortization of debt discount and issuance costs
and changes in the fair value of our preferred stock warrant liability.
Billings is a performance measure which our management believes provides
useful information to investors because it represents the amounts under
binding purchase orders received by us during a given period that have
been billed, and we calculate billings by adding the change in deferred
revenue between the start and end of the period to total revenue
recognized in the same period. Free cash flow is a performance measure
that our management believes provides useful information to management
and investors about the amount of cash generated by the business after
necessary capital expenditures, and we define free cash flow as net cash
(used in) provided by operating activities less purchases of property
and equipment. Non-GAAP gross profit, adjusted gross margin and non-GAAP
operating expense are performance measures which our management believes
provides useful information to investors because they provide meaningful
supplemental information regarding our performance and liquidity by
excluding certain expenses and expenditures such as stock-based
compensation expense that may not be indicative of our ongoing core
business operating results. Software and support revenue and software
and support billings are performance measures that our management
believes provide useful information to our management and investors as
it allows us to better track the true growth of our software business
without the amounts attributable to the pass-through hardware that we
use to deliver our solutions. We use these non-GAAP financial and key
performance measures for financial and operational decision-making and
as a means to evaluate period-to-period comparisons. However, these
non-GAAP financial and key performance measures have limitations as
analytical tools and you should not consider them in isolation or as
substitutes for analysis of our results as reported under GAAP.
Billings, non-GAAP gross profit, non-GAAP gross margin, non-GAAP
operating expenses, non-GAAP net loss, pro forma non-GAAP net loss per
share, and free cash flow are not substitutes for total revenue, gross
profit, gross margin, operating expenses, net loss, net loss per share,
or net cash (used in) provided by operating activities, respectively. In
addition, other companies, including companies in our industry, may
calculate non-GAAP financial measures and key performance measures
differently or may use other measures to evaluate their performance, all
of which could reduce the usefulness of our non-GAAP financial measures
and key performance measures as tools for comparison. We urge you to
review the reconciliation of our non-GAAP financial measures and key
performance measures to the most directly comparable GAAP financial
measures included below in the tables captioned "Reconciliation of
Revenue to Billings," "Disaggregation of Revenue and Reconciliation of
Software and Support Revenue to Software and Support Billings,"
"Reconciliation of GAAP to Non-GAAP Profit Measures," and
"Reconciliation of GAAP Net Cash (Used In) Provided By Operating
Activities to Non-GAAP Free Cash Flow," and not to rely on any single
financial measure to evaluate our business.
Forward-Looking Statements
This press release contains express and implied forward-looking
statements, including but not limited to statements relating to our
competitive differentiation, our plans and expectations relating to
product sales and shifts in the mix of whether our solutions are sold as
an appliance or as software-only, our plans and expectations regarding
new products, services, product features and technology that are under
development or in process, and capabilities of such new products,
services, product features and technology, the impact recent
acquisitions to our business, our plans to introduce product features in
future releases, the integration of recently acquired intellectual
property and technology, and anticipated future financial results,
including but not limited to our guidance on estimated revenues,
non-GAAP gross margin, non-GAAP operating expenses and non-GAAP net loss
per share for future fiscal periods. These forward-looking statements
are not historical facts and instead are based on our current
expectations, estimates, opinions, and beliefs. Consequently, you should
not rely on these forward-looking statements. The accuracy of such
forward-looking statements depends upon future events and involves
risks, uncertainties, and other factors beyond our control that may
cause these statements to be inaccurate and cause our actual results,
performance or achievements to differ materially and adversely from
those anticipated or implied by such statements, including, among
others: failure to develop, or unexpected difficulties or delays in
developing, new products, services, product features or technology on a
timely or cost-effective basis; delays in or lack of customer or market
acceptance of our new products, services, product features or
technology; our ability to successfully integrate acquired companies,
employees and intellectual property; delays in the transition to focus
primarily on software-only transactions; the rapid evolution of the
markets in which we compete; our ability to sustain or manage future
growth effectively; factors that could result in the significant
fluctuation of our future quarterly operating results, including, among
other things, anticipated changes to our revenue and product mix which
will slow revenue growth during such transition and make forecasting
future performance more difficult, the timing and magnitude of orders,
shipments and acceptance of our solutions in any given quarter, our
ability to attract new and retain existing end-customers, changes in the
pricing of certain components of our solutions, and fluctuations in
demand and competitive pricing pressures for our solutions; the
introduction, or acceleration of adoption of, competing solutions,
including public cloud infrastructure; and other risks detailed in our
Quarterly Report on Form 10-Q for the quarter ended January 31, 2018,
filed with the SEC on March 15, 2018. Additional information will also
be set forth in our Form 10-Q that will be filed for the quarter ended
April 30, 2018, which should be read in conjunction with these financial
results. Our SEC filings are available on the Investor Relations section
of the company's website at ir.nutanix.com
and on the SEC's website at www.sec.gov.
These forward-looking statements speak only as of the date of this press
release and, except as required by law, we assume no obligation to
update forward-looking statements to reflect actual results or
subsequent events or circumstances.
About Nutanix
Nutanix is a global leader in cloud software and hyperconverged
infrastructure solutions, making infrastructure invisible so that IT can
focus on the applications and services that power their business.
Companies around the world use Nutanix Enterprise Cloud OS software to
bring one-click application management and mobility across public,
private and distributed edge clouds so they can run any application at
any scale with a dramatically lower total cost of ownership. The result
is organizations that can rapidly deliver a high-performance IT
environment on demand, giving application owners a true cloud-like
experience. Learn more at www.nutanix.com
or follow us on Twitter @nutanix.
© 2018 Nutanix, Inc. All rights reserved. Nutanix, the Nutanix logo and
all product and service names mentioned herein are registered trademarks
or trademarks of Nutanix, Inc. in the United States and other countries.
All other brand names mentioned herein are for identification purposes
only and may be the trademarks of their respective holder(s).
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|
|
NUTANIX, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
As of
|
|
|
July 31, 2017
|
|
April 30, 2018
|
|
|
(in thousands)
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
138,359
|
|
|
$
|
376,789
|
|
Short-term investments
|
|
210,694
|
|
|
546,675
|
|
Accounts receivable, net
|
|
178,876
|
|
|
194,323
|
|
Deferred commissions-current
|
|
23,843
|
|
|
30,274
|
|
Prepaid expenses and other current assets
|
|
28,362
|
|
|
36,615
|
|
Total current assets
|
|
580,134
|
|
|
1,184,676
|
|
Property and equipment, net
|
|
58,072
|
|
|
76,322
|
|
Deferred commissions-non-current
|
|
49,684
|
|
|
72,454
|
|
Intangible assets, net
|
|
26,001
|
|
|
47,790
|
|
Goodwill
|
|
16,672
|
|
|
88,324
|
|
Other assets-non-current
|
|
7,649
|
|
|
5,832
|
|
Total assets
|
|
$
|
738,212
|
|
|
$
|
1,475,398
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
73,725
|
|
|
$
|
71,405
|
|
Accrued compensation and benefits
|
|
57,521
|
|
|
61,221
|
|
Accrued expenses and other current liabilities
|
|
9,707
|
|
|
11,645
|
|
Deferred revenue-current
|
|
170,123
|
|
|
243,770
|
|
Total current liabilities
|
|
311,076
|
|
|
388,041
|
|
Deferred revenue-non-current
|
|
198,933
|
|
|
296,119
|
|
Convertible senior notes, net
|
|
-
|
|
|
422,567
|
|
Other liabilities-non-current
|
|
11,140
|
|
|
14,090
|
|
Total liabilities
|
|
521,149
|
|
|
1,120,817
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
4
|
|
|
4
|
|
Additional paid-in capital
|
|
948,134
|
|
|
1,296,575
|
|
Accumulated other comprehensive loss
|
|
(106
|
)
|
|
(1,237
|
)
|
Accumulated deficit
|
|
(730,969
|
)
|
|
(940,761
|
)
|
Total stockholders' equity
|
|
217,063
|
|
|
354,581
|
|
Total liabilities and stockholders' equity
|
|
$
|
738,212
|
|
|
$
|
1,475,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUTANIX, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
|
(in thousands, except share and per share data)
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
160,076
|
|
|
$
|
221,117
|
|
|
$
|
471,825
|
|
|
$
|
663,339
|
|
Support, entitlements and other services
|
|
45,594
|
|
|
68,296
|
|
|
121,620
|
|
|
188,370
|
|
Total revenue
|
|
205,670
|
|
|
289,413
|
|
|
593,445
|
|
|
851,709
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Product (1)(2)
|
|
62,593
|
|
|
66,680
|
|
|
173,206
|
|
|
235,059
|
|
Support, entitlements and other services (1)
|
|
20,613
|
|
|
28,935
|
|
|
56,608
|
|
|
77,706
|
|
Total cost of revenue
|
|
83,206
|
|
|
95,615
|
|
|
229,814
|
|
|
312,765
|
|
Gross profit
|
|
122,464
|
|
|
193,798
|
|
|
363,631
|
|
|
538,944
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing (1)(2)
|
|
126,746
|
|
|
169,860
|
|
|
366,745
|
|
|
466,466
|
|
Research and development (1)
|
|
74,607
|
|
|
81,291
|
|
|
220,802
|
|
|
216,727
|
|
General and administrative (1)
|
|
15,610
|
|
|
24,929
|
|
|
60,463
|
|
|
56,929
|
|
Total operating expenses
|
|
216,963
|
|
|
276,080
|
|
|
648,010
|
|
|
740,122
|
|
Loss from operations
|
|
(94,499
|
)
|
|
(82,282
|
)
|
|
(284,379
|
)
|
|
(201,178
|
)
|
Other income (expense), net
|
|
303
|
|
|
(4,235
|
)
|
|
(25,830
|
)
|
|
(5,285
|
)
|
Loss before provision for income taxes
|
|
(94,196
|
)
|
|
(86,517
|
)
|
|
(310,209
|
)
|
|
(206,463
|
)
|
Provision for (benefit from) income taxes
|
|
2,639
|
|
|
(843
|
)
|
|
3,297
|
|
|
3,329
|
|
Net loss
|
|
$
|
(96,835
|
)
|
|
$
|
(85,674
|
)
|
|
$
|
(313,506
|
)
|
|
$
|
(209,792
|
)
|
Net loss per share attributable to Class A and Class B common
stockholders-basic and diluted
|
|
$
|
(0.67
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(2.62
|
)
|
|
$
|
(1.30
|
)
|
Weighted-average shares used in computing net loss per share
attributable to Class A and Class B common stockholders-basic and
diluted
|
|
144,054,432
|
|
|
166,845,544
|
|
|
119,851,586
|
|
|
161,709,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the following stock-based compensation expense:
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
|
(in thousands)
|
Product cost of sales
|
|
$
|
610
|
|
|
$
|
634
|
|
|
$
|
2,424
|
|
|
$
|
1,888
|
Support cost of sales
|
|
2,471
|
|
|
1,951
|
|
|
8,210
|
|
|
6,156
|
Sales and marketing
|
|
15,726
|
|
|
18,051
|
|
|
65,145
|
|
|
47,759
|
Research and development
|
|
27,041
|
|
|
16,474
|
|
|
89,826
|
|
|
49,039
|
General and administrative
|
|
4,503
|
|
|
7,836
|
|
|
28,081
|
|
|
17,630
|
Total stock-based compensation expense
|
|
$
|
50,351
|
|
|
$
|
44,946
|
|
|
$
|
193,686
|
|
|
$
|
122,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Includes the following amortization of intangible assets:
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
|
(in thousands)
|
Product cost of sales
|
|
$
|
358
|
|
|
$
|
1,447
|
|
|
$
|
956
|
|
|
$
|
3,506
|
Sales and marketing
|
|
250
|
|
|
222
|
|
|
665
|
|
|
625
|
Total amortization of intangible assets
|
|
$
|
608
|
|
|
$
|
1,669
|
|
|
$
|
1,621
|
|
|
$
|
4,131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NUTANIX, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
|
(in thousands)
|
Cash flows from operating activities:
|
|
|
|
|
Net loss
|
|
$
|
(313,506
|
)
|
|
$
|
(209,792
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and amortization
|
|
27,934
|
|
|
36,013
|
|
Stock-based compensation
|
|
193,686
|
|
|
122,472
|
|
Loss on debt extinguishment
|
|
3,320
|
|
|
-
|
|
Change in fair value of convertible preferred stock warrant liability
|
|
21,133
|
|
|
-
|
|
Change in fair value of contingent consideration
|
|
176
|
|
|
(3,371
|
)
|
Amortization of debt discount and debt issuance cost
|
|
-
|
|
|
7,654
|
|
Other
|
|
601
|
|
|
(186
|
)
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable, net
|
|
(58,841
|
)
|
|
(15,307
|
)
|
Deferred commissions
|
|
(14,688
|
)
|
|
(29,201
|
)
|
Prepaid expenses and other assets
|
|
(29,628
|
)
|
|
(5,327
|
)
|
Accounts payable
|
|
32,468
|
|
|
(6,407
|
)
|
Accrued compensation and benefits
|
|
32,000
|
|
|
3,700
|
|
Accrued expenses and other liabilities
|
|
5,399
|
|
|
(1,147
|
)
|
Deferred revenue
|
|
107,849
|
|
|
170,709
|
|
Net cash provided by operating activities
|
|
7,903
|
|
|
69,810
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
(37,797
|
)
|
|
(46,089
|
)
|
Purchases of investments
|
|
(156,420
|
)
|
|
(485,777
|
)
|
Maturities of investments
|
|
59,542
|
|
|
147,868
|
|
Sales of investments
|
|
32,640
|
|
|
-
|
|
Payments for business combinations, net of cash acquired
|
|
(184
|
)
|
|
(22,792
|
)
|
Net cash used in investing activities
|
|
(102,219
|
)
|
|
(406,790
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Proceeds from issuance of convertible senior notes, net
|
|
-
|
|
|
563,937
|
|
Proceeds from issuance of warrants
|
|
-
|
|
|
87,975
|
|
Payments for the cost of convertible note hedges
|
|
-
|
|
|
(143,175
|
)
|
Proceeds from initial public offering, net of underwriting discounts
and commissions
|
|
254,455
|
|
|
-
|
|
Proceeds from sales of shares through employee equity incentive
plans, net of repurchases
|
|
26,662
|
|
|
68,186
|
|
Repayment of senior notes
|
|
(75,000
|
)
|
|
-
|
|
Debt extinguishment costs
|
|
(1,580
|
)
|
|
-
|
|
Payments of offering costs
|
|
(1,609
|
)
|
|
(85
|
)
|
Payment of debt in conjunction with business combinations
|
|
(7,124
|
)
|
|
(1,428
|
)
|
Other
|
|
77
|
|
|
-
|
|
Net cash provided by financing activities
|
|
195,881
|
|
|
575,410
|
|
Net increase in cash and cash equivalents
|
|
101,565
|
|
|
238,430
|
|
Cash and cash equivalents-beginning of period
|
|
99,209
|
|
|
138,359
|
|
Cash and cash equivalents-end of period
|
|
$
|
200,774
|
|
|
$
|
376,789
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
3,559
|
|
|
$
|
8,038
|
|
Cash paid for interest
|
|
$
|
1,271
|
|
|
$
|
-
|
|
Supplemental disclosures of non-cash investing and financing
information:
|
|
|
|
|
Issuance of common stock for business combinations
|
|
$
|
27,063
|
|
|
$
|
63,780
|
|
Purchases of property and equipment included in accounts payable and
accrued liabilities
|
|
$
|
4,496
|
|
|
$
|
9,285
|
|
Vesting of early exercised stock options
|
|
$
|
1,293
|
|
|
$
|
570
|
|
Convertible senior notes offering costs included in accounts payable
and accrued liabilities
|
|
$
|
-
|
|
|
$
|
425
|
|
Offering costs included in accounts payable
|
|
$
|
51
|
|
|
$
|
-
|
|
Conversion of convertible preferred stock to common stock, net of
issuance costs
|
|
$
|
310,379
|
|
|
$
|
-
|
|
Reclassification of convertible preferred stock warrant liability to
additional paid-in capital
|
|
$
|
30,812
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Revenue to Billings
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
|
(in thousands)
|
Total revenue
|
|
$
|
205,670
|
|
|
$
|
289,413
|
|
|
$
|
593,445
|
|
|
$
|
851,709
|
Change in deferred revenue, net of acquisitions (1)
|
|
28,477
|
|
|
61,765
|
|
|
107,849
|
|
|
170,709
|
Billings
|
|
$
|
234,147
|
|
|
$
|
351,178
|
|
|
$
|
701,294
|
|
|
$
|
1,022,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount for the nine months ended April 30, 2017 excluded
approximately $6.0 million of deferred revenue assumed in the
PernixData acquisition. Amounts for the three and nine months ended
April 30, 2018 excluded approximately $0.1 million of deferred
revenue assumed in an acquisition.
|
|
|
|
|
|
Disaggregation of Revenue and Reconciliation of Software and
Support Revenue to Software and Support Billings
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
|
(in thousands)
|
Software revenue
|
|
$
|
100,810
|
|
|
$
|
158,500
|
|
|
$
|
308,400
|
|
|
441,885
|
Hardware revenue
|
|
59,266
|
|
|
62,617
|
|
|
163,425
|
|
|
221,454
|
Product revenue
|
|
160,076
|
|
|
221,117
|
|
|
471,825
|
|
|
663,339
|
Support, entitlements and other services revenue
|
|
45,594
|
|
|
68,296
|
|
|
121,620
|
|
|
188,370
|
Total revenue
|
|
$
|
205,670
|
|
|
$
|
289,413
|
|
|
$
|
593,445
|
|
|
$
|
851,709
|
|
|
|
|
|
|
|
|
|
Total software and support revenue
|
|
$
|
146,404
|
|
|
$
|
226,796
|
|
|
$
|
430,020
|
|
|
$
|
630,255
|
Change in software and support deferred revenue, net of acquisitions (1)(2)
|
|
28,477
|
|
|
65,156
|
|
|
107,849
|
|
|
170,709
|
Software and support billings
|
|
$
|
174,881
|
|
|
$
|
291,952
|
|
|
$
|
537,869
|
|
|
$
|
800,964
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amount for the nine months ended April 30, 2017 excluded
approximately $6.0 million of deferred revenue assumed in the
PernixData acquisition. Amounts for the three and nine months ended
April 30, 2018 excluded approximately $0.1 million of deferred
revenue assumed in an acquisition.
|
(2)
|
|
Approximately $3.4 million of hardware was included in deferred
revenue as of January 31, 2018.
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Profit Measures
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP Adjustments
|
|
Non-GAAP
|
|
|
Three Months Ended April 30, 2018
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
Three Months Ended April 30, 2018
|
|
|
(in thousands, except share and per share data)
|
Gross profit
|
|
$
|
193,798
|
|
|
$
|
2,585
|
|
|
$
|
1,447
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
197,830
|
|
Gross margin
|
|
67.0
|
%
|
|
0.9
|
%
|
|
0.5
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
68.4
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
169,860
|
|
|
(18,051
|
)
|
|
(222
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
151,587
|
|
Research and development
|
|
81,291
|
|
|
(16,474
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
64,817
|
|
General and administrative
|
|
24,929
|
|
|
(7,836
|
)
|
|
-
|
|
|
(584
|
)
|
|
(515
|
)
|
|
-
|
|
|
-
|
|
|
15,994
|
|
Total operating expenses
|
|
276,080
|
|
|
(42,361
|
)
|
|
(222
|
)
|
|
(584
|
)
|
|
(515
|
)
|
|
-
|
|
|
-
|
|
|
232,398
|
|
Loss from operations
|
|
(82,282
|
)
|
|
44,946
|
|
|
1,669
|
|
|
584
|
|
|
515
|
|
|
-
|
|
|
-
|
|
|
(34,568
|
)
|
Net loss
|
|
$
|
(85,674
|
)
|
|
$
|
44,946
|
|
|
$
|
1,669
|
|
|
$
|
584
|
|
|
$
|
515
|
|
|
$
|
6,916
|
|
|
$
|
(3,581
|
)
|
|
$
|
(34,625
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
166,845,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
166,845,544
|
|
Net loss per share, basic and diluted
|
|
$
|
(0.51
|
)
|
|
$
|
0.27
|
|
|
$
|
0.01
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
0.04
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Change in fair value of contingent consideration assumed in
the PernixData acquisition
|
(4) Acquisition-related costs
|
(5) Amortization of debt discount and issuance costs
|
(6) Partial release of valuation allowance from acquisitions and
income tax effect, primarily related to stock-based compensation
expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP Adjustments
|
|
Non-GAAP
|
|
|
Three Months Ended April 30, 2017
|
|
(1)
|
(2)
|
(3)
|
(4)
|
|
Three Months Ended April 30, 2017
|
|
|
(in thousands, except share and per share data)
|
Gross profit
|
|
$
|
122,464
|
|
|
$
|
3,081
|
|
$
|
358
|
|
$
|
-
|
|
$
|
-
|
|
|
$
|
125,903
|
|
Gross margin
|
|
59.5
|
%
|
|
1.5
|
%
|
0.2
|
%
|
-
|
|
-
|
|
|
61.2
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
126,746
|
|
|
(15,726
|
)
|
(250
|
)
|
-
|
|
-
|
|
|
110,770
|
|
Research and development
|
|
74,607
|
|
|
(27,041
|
)
|
-
|
|
-
|
|
-
|
|
|
47,566
|
|
General and administrative
|
|
15,610
|
|
|
(4,503
|
)
|
-
|
|
296
|
|
-
|
|
|
11,403
|
|
Total operating expenses
|
|
216,963
|
|
|
(47,270
|
)
|
(250
|
)
|
296
|
|
-
|
|
|
169,739
|
|
Loss from operations
|
|
(94,499
|
)
|
|
50,351
|
|
608
|
|
(296
|
)
|
-
|
|
|
(43,836
|
)
|
Net loss
|
|
$
|
(96,835
|
)
|
|
$
|
50,351
|
|
$
|
608
|
|
$
|
(296
|
)
|
$
|
513
|
|
|
$
|
(45,659
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
144,054,432
|
|
|
|
|
|
|
|
144,054,432
|
|
Net loss per share, basic and diluted
|
|
$
|
(0.67
|
)
|
|
$
|
0.35
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
$
|
(0.32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Change in fair value of contingent consideration assumed in
the PernixData acquisition
|
(4) Income tax effect, primarily related to stock-based
compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP Adjustments
|
|
Non-GAAP
|
|
|
Nine Months Ended April 30, 2018
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
Nine Months Ended April 30, 2018
|
|
|
(in thousands, except share and per share data)
|
Gross profit
|
|
$
|
538,944
|
|
|
$
|
8,044
|
|
|
$
|
3,506
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
550,494
|
|
Gross margin
|
|
63.3
|
%
|
|
0.9
|
%
|
|
0.4
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
64.6
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
466,466
|
|
|
(47,759
|
)
|
|
(625
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
418,082
|
|
Research and development
|
|
216,727
|
|
|
(49,039
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
167,688
|
|
General and administrative
|
|
56,929
|
|
|
(17,630
|
)
|
|
-
|
|
|
3,371
|
|
|
(1,043
|
)
|
|
-
|
|
|
-
|
|
|
41,627
|
|
Total operating expenses
|
|
740,122
|
|
|
(114,428
|
)
|
|
(625
|
)
|
|
3,371
|
|
|
(1,043
|
)
|
|
-
|
|
|
-
|
|
|
627,397
|
|
Loss from operations
|
|
(201,178
|
)
|
|
122,472
|
|
|
4,131
|
|
|
(3,371
|
)
|
|
1,043
|
|
|
-
|
|
|
-
|
|
|
(76,903
|
)
|
Net loss
|
|
$
|
(209,792
|
)
|
|
$
|
122,472
|
|
|
$
|
4,131
|
|
|
$
|
(3,371
|
)
|
|
$
|
1,043
|
|
|
$
|
7,654
|
|
|
$
|
(4,653
|
)
|
|
$
|
(82,516
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
161,709,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
161,709,365
|
|
Net loss per share, basic and diluted
|
|
$
|
(1.30
|
)
|
|
$
|
0.76
|
|
|
$
|
0.02
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
0.05
|
|
|
$
|
(0.03
|
)
|
|
$
|
(0.51
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Change in fair value of contingent consideration assumed in
the PernixData acquisition
|
(4) Acquisition-related costs
|
(5) Amortization of debt discount and issuance costs
|
(6) Partial release of valuation allowance from acquisitions and
income tax effect, primarily related to stock-based compensation
expense.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP Adjustments
|
|
Non-GAAP
|
|
|
Nine Months Ended April 30, 2017
|
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
(6)
|
|
(7)
|
|
Nine Months Ended April 30, 2017
|
|
|
(in thousands, except share and per share data)
|
Gross profit
|
|
$
|
363,631
|
|
|
$
|
10,634
|
|
|
$
|
956
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
375,221
|
|
Gross margin
|
|
61.3
|
%
|
|
1.8
|
%
|
|
0.1
|
%
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
63.2
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
366,745
|
|
|
(65,145
|
)
|
|
(665
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
300,935
|
|
Research and development
|
|
220,802
|
|
|
(89,826
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
130,976
|
|
General and administrative
|
|
60,463
|
|
|
(28,081
|
)
|
|
-
|
|
|
(672
|
)
|
|
(176
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
31,534
|
|
Total operating expenses
|
|
648,010
|
|
|
(183,052
|
)
|
|
(665
|
)
|
|
(672
|
)
|
|
(176
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
463,445
|
|
Loss from operations
|
|
(284,379
|
)
|
|
193,686
|
|
|
1,621
|
|
|
672
|
|
|
176
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(88,224
|
)
|
Net loss
|
|
$
|
(313,506
|
)
|
|
$
|
193,686
|
|
|
$
|
1,621
|
|
|
$
|
672
|
|
|
$
|
176
|
|
|
$
|
21,133
|
|
|
$
|
3,320
|
|
|
$
|
(1,768
|
)
|
|
$
|
(94,666
|
)
|
Weighted-shares outstanding, basic and diluted
|
|
119,851,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119,851,586
|
|
Pro forma adjustment
|
|
18,171,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,171,312
|
|
Pro forma weighted-shares outstanding, basic and diluted
|
|
138,022,898
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138,022,898
|
|
Net loss per share, basic and diluted
|
|
$
|
(2.62
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.79
|
)
|
Pro forma net loss per share, basic and diluted(8)
|
|
$
|
(2.27
|
)
|
|
$
|
1.40
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
-
|
|
|
$
|
0.15
|
|
|
$
|
0.02
|
|
|
$
|
(0.01
|
)
|
|
$
|
(0.69
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Stock-based compensation expense
|
(2) Amortization of intangible assets
|
(3) Acquisition-related costs
|
(4) Change in fair value of contingent consideration assumed in
the PernixData acquisition
|
(5) Change in fair value of preferred stock warrant liability
|
(6) Loss on debt extinguishment
|
(7) Partial release of valuation allowance from the PernixData
acquisition and the tax effect of stock-based compensation expense
|
(8) Pro forma non-GAAP basic and diluted net loss per share was
computed to give effect to the conversion of all outstanding
convertible preferred stock upon closing of our initial public
offering on October 5, 2016, as if the conversion had occurred at
the beginning of the period.
|
|
|
|
|
|
|
Reconciliation of GAAP Net Cash Provided by Operating
Activities to Non-GAAP Free Cash Flow
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended April 30,
|
|
Nine Months Ended April 30,
|
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
|
(in thousands)
|
Net cash (used in) provided by operating activities
|
|
$
|
(16,009
|
)
|
|
$
|
13,308
|
|
|
$
|
7,903
|
|
|
$
|
69,810
|
|
Purchases of property and equipment
|
|
(13,181
|
)
|
|
(14,096
|
)
|
|
(37,797
|
)
|
|
(46,089
|
)
|
Free cash flow
|
|
$
|
(29,190
|
)
|
|
$
|
(788
|
)
|
|
$
|
(29,894
|
)
|
|
$
|
23,721
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180524006043/en/
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